New agenda for aid, trade and investment

The Cabinet has approved the new policy document 'What the world deserves: A new agenda for aid, trade and investment' proposed by the Minister for Foreign Trade and Development Cooperation, Lilianne Ploumen. In the document the government embraces three ambitions: to eradicate extreme poverty within a generation, to promote sustainable and inclusive growth across the globe and to facilitate success for Dutch companies doing business abroad.

In the new document the government seeks to synergise trade and development policy. Doing so is essential in the new economic world order. Countries that were once among the least prosperous are now confident and rapidly growing trading nations. Most of the world's people living in extreme poverty are to be found in the emerging economies. And although the Netherlands is a leading trading nation, it is not yet profiting sufficiently from the economic growth that Asia, Africa and Latin America are experiencing.

Where aid and trade meet, the Netherlands will be guided in its policy by both solidarity and enlightened self-interest. The combination of aid and trade can be mutually beneficial. The Netherlands is therefore transitioning from an aid to a trade relationship with more and more countries. But since economic growth is not yet benefiting all sections of the population, the government's guiding principle remains sustainable and inclusive growth. The Netherlands will therefore continue to tackle inequality, to invest in the rule of law and to emphasise the importance of sustainability.

The number of partner countries - countries with whom the Netherlands maintains an aid-based relationship - will not change. Once a country outgrows the need for aid, a new partner country can take its place. The Netherlands' trade relations will be geared primarily towards countries that can help our top sectors realise their international ambitions.

Under the coalition agreement, €1 billion in cuts to the Netherlands' development cooperation programme will be introduced as of 2017. The cuts are broadly outlined in the new policy document. There will be no cuts to emergency aid, or to the policy themes women's rights and sexual and reproductive health and rights. Existing funding agreements for civil society organisations (MFSII) will be maintained until 2016. After that date, there will be changes to funding arrangements in line with the more limited budget. In addition voluntary contributions to multilateral organisations will be reduced, and the cutbacks to budgets for policy themes like good governance, the environment and education will be accelerated.

The government is also introducing two new funding instruments. The international security budget (€250 million a year) is intended for integrated activities in the framework of the '3D approach' (diplomacy, development and defence) aimed at preventing conflict and tackling inequality and instability in developing countries.

The Dutch Good Growth Fund (€750 million in total) is a revolving fund which offers tailored funding arrangements for entrepreneurs (particularly small and medium-sized enterprises) that have solid business or investment plans and relevance to development, and whose business practices are sustainable and socially responsible. Financing will be available for:

  • enterprises in low- and middle-income countries making direct, innovative  investments involving a substantial element of risk;
  • Dutch enterprises wishing to engage in commercial activities with partners in low- or middle-income countries; and
  • Dutch enterprises aiming to export to low- and middle-income countries.